Altruism, moral norms and social approval: Joint determinants of individual offset behavior

- The paper provides a theoretical framework for individual offset behavior.
- The theoretical analysis accounts for various motivations in a unified framework.
- A choice experiment on carbon offsetting supports the theoretical analysis.
- Demand for offsets seems to be driven by internalized norms to avoid pollution.
- The probability to offset increases with the expected social approval for offsetting.

We provide a theoretical and empirical analysis of individual offset behavior, with environmental offsets as a specific form of voluntary public good provision. While existing theoretical models on the voluntary provision of public goods usually focus exclusively on single motivations for individual contributions, we explicitly account for various motivations in a unified framework, drawing on theories for public good provision such as pure and impure altruism, internalized norms and social approval. Such an approach is particularly useful when individual offset behavior is heterogeneous. The applicability of our theoretical framework is supported by data from a choice experiment on voluntary carbon offsetting in Switzerland and the USA. We find that willingness to pay for offsets mainly depends on an individual's internalized norms to avoid environmental degradation as well as partly on income. The probability to offset, instead, is better explained by an individual's expected social recognition for offsetting.